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The
percentage of failed direct debits - mostly used for utility
bills or mortgage and credit card repayments - rose from 0.82%
in July to 0.83% in August, the second highest rate in monthly
records, which started in January 2019.
A year earlier, in August 2022, 0.73% of direct debits failed.
The peak in the series was in January, at 0.94%, reflecting a
post-Christmas spike as households ran out of money in their
current accounts.
The figures are published by Britain's Office for National
Statistics based on data from interbank payment systems
operators Pay.UK and Vocalink.
British households' finances have been under pressure over the
past year from high inflation and rising interest rates.
Consumer price inflation hit a 41-year high of 11.1% in October
2022 and was still far above target at 6.8% in July, the highest
among major advanced economies. Food and energy bills have risen
faster than other prices, hurting poorer households.
The Bank of England has raised rates 14 times since December
2021 and economists expect it to raise rates for a 15th time
next week to 5.5% - bringing higher bills for mortgage-holders.
Thursday's data showed 0.46% of direct debits for mortgages were
missed in August, unchanged from the month before but up 21%
from a year earlier.
Fitness club memberships - whose onerous cancellation terms
sometimes see consumers refuse to pay - had the highest direct
debit failure rate, at 4.44%.
Separate figures on personal bankruptcies and debt relief orders
released last month showed a sharp rise in July, with the total
up 38% on a year earlier.
However, unlike the missed direct debit payments, the numbers
for these more serious indicators of financial difficulty remain
below pre-pandemic levels.
(Reporting by David Milliken; Graphic by Andy Bruce; Editing by
Clarence Fernandez)
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